Akorn Inc. (NASDAQ: AKRX) saw its shares crater on Tuesday after some doubts were cast on its potential acquisition by German health care group Fresnius. This isn’t the first time that Akorn has faced concerns regarding its security, but this could be the costliest.
Essentially, Fresenius is conducting an independent investigation into “alleged breaches” at Akorn. These breaches have to deal with FDA data integrity requirements in regards to product development.
According to Fresenius:
The Management and Supervisory Boards of Fresenius will assess the findings of that investigation. The consummation of the transaction may be affected if the closing conditions under the merger agreement are not met.
Previously, Akorn was hacked in 2015. Its database was put up for sale on a dark web forum by a hacker under the alias of Mufasa. But it gets worse. Mufasa commented about Akorn’s security to CSO’s Salted Hash:
Every PHP file on their website was vulnerable to [SQL Injection] … They had no security whatsoever.
If Akorn hasn’t updated its security since 2015, it could be in some real trouble and it would be reasonable for Fresenius to back out of the deal.
However, Akorn issued a statement in its defense as this current investigation is ongoing:
Akorn and Fresenius Kabi AG, with the assistance of outside consultants, are investigating alleged breaches of FDA data integrity requirements relating to product development at the Company. To date, the Company’s investigation has not found any facts that would result in a material impact on Akorn’s operations and the Company does not believe this investigation should affect the closing of the transaction with Fresenius. The Company does not intend to provide further updates as the investigation proceeds. The Company is continuing to work to obtain regulatory clearance for the transaction.
Shares of Akorn were last seen down about 31% at $20.79 on Tuesday, with a consensus analyst price target of $31.14 and a 52-week range of $20.00 to $34.00.